Fund review: Betting on mid-and smallcaps with growth potential

Most fund managers and sector analysts are interested in mid-and-small sized companies which have visibility of revenues.

Most fund managers and sector analysts are interested in mid-and-small sized companies which have visibility of revenues.

One of the important developments that savvy investors are waiting with bated breath is earnings’ growth. Despite the fact that share prices of most mid-and-small sized companies have run up in the past one-and-a-half years, most fund managers and sector analysts are interested in mid-and-small sized companies which have visibility of revenues. This is one of the chief reasons to be invested with mid-and small sized companies which have high potential for strong growth in revenues in the next few years. Once the economy returns to revival mode and enters high growth phase, these mid and small sized companies are expected to show sharp improvement in earnings. To capture this, uptick in earnings’ growth, it makes sense to be with schemes which have keen focus on high growth companies. One such scheme is Franklin India High Growth Companies Fund. It is best suited to investors who are willing to accept volatility as a norm in investments than as aberration. The scheme selects companies based on a few key parameters such as enterprise value, price to earnings’ growth ratio, forward price to sales ratio and discounted earnings per share.